Imagine consulting your business insurance agent prior to building a website?  If done properly, your website could yield business for years and years to come.  However, have you ever considered how your website affects your business insurance rates?  This blog post should shed a little light on the best insurance practices for small business websites.

Focus on Your Primary Money Maker

The first thing any business owner should do is focus on the product that yields them the high potential for profit.  Odd are, if you’re a plumber, you want a website designed to get you more plumbing business.  The same holds true for other businesses like electricians, painters, and many others.  Unfortunately, because  small businesses want to ensure they get as many money making opportunities as possible, many entrepreneurs break this rule.

Instead of focusing a primary business service or trade, many startups and small business owners will list every possible  thing they know they can do on their website.  Most do this in hopes of someone stumbling across their site and saying, “Hey!  This guy does roofing, electrical, and carpentry! Maybe I can get them to do all my work!”

From a small business perspective, this is understandable.  From a commercial insurance underwriter’s perspective, these means more exposure to losses.  In cases like this, adding every possible exposure to your website will actually increase your business insurance premiums.  Think of it this way.  Which of the following risks should get the lower rates:  The plumber that does plumbing only; or  the plumber that does plumbing, electrical work, and A/C work.

If you said the plumber who only lists plumbing should get the lower rates, then you’re correct.  In business insurance, the underwriting department is limited to the amount of information he can get.  Therefore, commercial underwriters now ask for a company’s website to determine if there’s anything (ELSE) they should worry about covering.  In the case of the plumber, more is not necessarily better.

Remember Social Media

On top of looking at a company’s website, business insurance underwriters will also look for a company’s social media accounts and profile on places like Google+, LinkedIn, and Facebook.  Today, additional information gained from these new sources play a large role in commercial underwriting for business insurance policies of all sizes.  As a result, not only should you pay close attention to your website or blog’s content, you should also pay attention to your social media accounts as well.  Your online resume could ultimately cost you money if you make a mistake.

So remember, if you’re in the market to build a new website for your business, be sure to consult with a business insurance agent that understands what commercial underwriting departments look for.  Remember , your insurance agent can be an advocate for helping your business focus profitable and ahead of your competition.

A new white paper from the I.I.I. observes that like any other new technology, social media brings enormous opportunities and benefits.

Yet as businesses and individuals navigate this shifting online risk landscape, they face a range of evolving social media related liabilities including privacy, security, intellectual property and employment practices liability.

The proliferation of social media use comes amid growing concerns over cyber security. Businesses that store confidential customer and client information online are exposed to increasing liabilities and costs as a result of cyber attacks and data breaches.

A massive data breach at Sony Corp’s online game networks in April 2011 resulted in the theft of more than 100 million online accounts, for example. Just months later in October 2011 Sony’s Playstation Network and other online entertainment services were hit in a second attack that compromised 93,000 user accounts.

Coming in the wake of the 2010 Wikileaks breaches of classified data, these high profile data breach incidents have served to increase both public and government scrutiny of cyber security practices.

The Securities and Exchange Commission (SEC) recently issued guidance urging publicly traded companies to disclose significant instances of cyber risks and events. Description of relevant insurance coverage was included in the SEC’s list of appropriate disclosures.

While traditional insurance policies typically have not handled these emerging risks, in recent years limited coverage under traditional policies has become available.

But as reliance on traditional policies is not enough, specialist social media and cyber insurance policies have been developed by insurers to help businesses and individuals protect themselves from an ever-evolving range of risks.

To learn more about this emerging risk area, check out the I.I.I. white paper “Social Media, Liability and Insurance.”

via:  Claire Wilkinson

Social Media Brings Growing Opportunities and Liability » Insurance Industry Blog.

Dr. Robert Hartwig, CPCU | December 15, 2011

In their new report, “Repeat Offenders: How the Insurance Industry Manufactures Crises and Harms America,” co-authors Robert Hunter and Joanne Doroshow claim that that the property/casualty insurance industry “manufactures” crises in order to justify raising rates and that the industry is “anti-competitive” and in need of more regulation. Even to people unfamiliar with insurance markets, the authors and Americans for Insurance Reform (AIR), which issued the report, could not possibly come across as oblivious to the risks associated with devastating natural disasters and global economic volatility.

Insured losses from catastrophes around the globe totaled an estimated $108 billion in 2011, the second highest year in history. More than $30 billion of those losses occurred in the United States, likely the fifth or sixth most expensive year on record. Since 2004, storms like Katrina, Rita, Wilma and Ike, combined with other events have resulted in nearly $200 billion in catastrophe claims paid to millions of home, business and vehicle owners.

Over the same period of time, insurance premiums charged to businesses, actually fell by 40 percent between 2004 and mid-2011. Indeed, the cost of business insurance fell for 30 consecutive quarters before edging up by just 1 to 2 percent in the second half of 2011. In short, while near-record catastrophe losses are a challenge, they have by no means precipitated a “crisis” as AIR alleges. Insurance and reinsurance markets remain competitive, capacity is available and coverage remains affordable.

Strangely, the AIR and its authors, argue in the report that the industry’s strong capital position is evidence of excessive profits. AIR’s claim is both dangerous and factually incorrect. Buyers of insurance are the primary beneficiaries of a financially strong, stable and secure insurance industry. Millions of victims of catastrophes would no doubt agree. The fact that insurers and reinsurers entered 2011 with record capital on hand to pay claims is unambiguously a good thing for all policyholders. Moreover, over the past four years, while the Great Recession and its aftermath forced hundreds of thousands of businesses to fail, including hundreds of banks—not a single traditional property/casualty insurer failed as a result of the financial crisis and not a single valid claim went unpaid.

AIR’s implied argument that insurers should carry less capital in this era of mega-disasters and unprecedented financial market volatility is irresponsible. In addition, the suggestion that the build-up in capital is the result of excessive profits is unsupported by the facts. Indeed, the average return equity for the property/casualty insurance industry from 2000 through 2011 is 6.7 percent, barely half the 13.1 percent for the Fortune 500 group over the same period.

The bottom line is the property/casualty insurance industry is a financially strong, highly competitive, resilient and essential industry in the United States and around the world. Buyers have the ability to choose from a wide range of products offered by a multitude of competing carriers while having the confidence that their insurer will be there for them in their time of greatest need.

via III – I.I.I. Response to Americans for Insurance Reform Report.

One way to help lower personal and business cyber risk is to avoid using easy-to-crack passwords. SplashData, a password management application maker, recently compiled a list of the 25 worst passwords for the year 2011.

The research results were based on millions of actually stolen passwords that were made available online.

Having tough-to-guess passwords may not necessarily deter sophisticated, determined hackers. But they do make it much more difficult for amateur cyber thieves to breach online accounts. Here is the list of this year’s worst online passwords.

1. password

2. 123456

3. 12345678

4. qwerty

5. abc123

6. monkey

7. 1234567

8. letmein

9. trustno1

10. dragon

11. baseball

12. 111111

13. iloveyou

14. master

15. sunshine

16. ashley

17. bailey

18. passw0rd

19. shadow

20. 123123

21. 654321

22. superman

23. qazwsx

24. michael

25. football

Want to Reduce Cyber Risk? Avoid These 25 Worst Passwords of 2011.

According to the U.S. Department of Transportation press release, “Drivers who violate the restriction will face federal civil penalties of up to $2,750 for each offense and disqualification from operating a commercial motor vehicle for multiple offenses.”  Additionally states will now suspend licenses of drivers of with two or more major violations while operating a commercial vehicle.

New rules also affect companies as well.  Commercial truck and bus companies that allow their drivers to use hand-held cell phones while driving will face a maximum penalty of $11,000.

Although results are mixed, data from FMCSA studies show that nearly 5474 people died and half a million were injured in crashes involving a distracted driver in 2009.

While studies yield mixed results, distraction-related fatalities represented 16 percent of overall traffic fatalities in 2009, according to National Highway Traffic Safety Administration (NHTSA) research.

In order to promote the administration’s latest efforts against distracted driving, the FMCSA and Department of Transportation launched DISTRACTION.GOV.

What are your thoughts regarding this new rule?

via fastlane.dot.gov

According to Reuters and the Insurance Journal Magazine, U.S. Treasury Secretary Timothy Geithner said on Thursday that opponents of financial-sector reform were trying to sabotage efforts to strengthen the system against crisis.

“With millions of Americans still struggling to find work…and even in the face of the European crisis, we are seeing a determined effort to slow and weaken reforms that are critical to our ability to protect Americans from another crisis,” Geithner told a conference to mark the setting up of the Office of Financial Research.

He said “forces working against reform” were blocking appointments to oversight positions, cutting funding, proposing new legislation to repeal parts of the Dodd-Frank law and trying to slow regulation “in the hopes of watering it down.”

The Treasure Secretary fell short of specifically naming reform opponents, but all fingers point to Republican lawmakers that have opposed reform attempts since the 2007-2009 collapse.

Geithner said the financial system was “in much stronger shape than before the crisis” but said that, if opponents of reform are successful they could still create conditions in which the economy would be vulnerable to crises.

via Geithner Hits Attempts to Weaken Wall Street Reforms.

Europe’s sovereign debt crisis could have a negative impact on the U.S. property and casualty industry’s ability to change the course of the soft market should the economy fall into another recession, an industry consultant says.

In a commentary on the current state of the insurance marketplace, Charles Ruoff, president of CR Market Strategies Inc., says recessions have historically put a damper on the industry’s ability to “alter the direction of soft market cycles on itsown initiative.”

From 1967 through 2009, periods of recession have dramatically affected pretax operating income, falling as much as 10 percent during the recessionary period.

The rise and fall in operating income has also mirrored the U.S. gross domestic product, rising and falling almost in tandem over the same period.

The spending on U.S. commercial insurance “is directly influenced by economic conditions as commercial and institutional buyers will adjust risk retention/transfer decisions in direct relation to economic realities and outlook,” Ruoff notes.

There remains excess capital in the foreign reinsurance markets and in the United States. Despite an unusually active global catastrophe year, insured losses were “widely spread” making capital reductions modest and “not market-turning events,” he points out. The result, outside of specific loss related events, pricing has not seen a general run-up.

“The largest global reinsures are on track to good earnings in 2011, despite the catastrophe losses,” says Ruoff. “That is a credit to the shock-absorbing ability of the market resources and the fact that much of the catastrophe costs are ultimately absorbed directly or indirectly by government programs.”

However, using the past as a guide to the future, if Europe pushes the United States into another recession then “the P&C underwriting market will have to wait possibly until some time in 2013 before a cyclical type pricing change in commercial rates can be realized.”

Ruoff continues, “What we are witnessing now in the market has to do more with a leveling off of further historic rate reductions rather than a broad and sustained upward movement in pricing.”

Experts have suggested that the P&C industry is ripe for a turnaround. In the latest analysis, rating agency Moody’s says that for the 2011 third quarter, net income for the industry was down 70 percent over the same period last year.

The report followed another from Fitch Rating that says underwriting results for the first nine months of the year have deteriorated significantly over last year.

However, there are signs that carriers are getting rate increases, such as the recent survey from the Council of Insurance Agents & Brokers that found overall average rates have turned positive for the first time since 2003. But again, they are hitting speed bumps on their way to rate increases.

Europe’s Sovereign Debt Crisis Could Torpedo P&C Market Turn | PropertyCasualty360.

So you want to become an owner operator.  Believe it or not, becoming an owner operator is easier than you think.  To date, our agency has assisted a number of professional drivers in their quest to become owner-operator truckers.  Regardless of whether you’re running hotshot loads, dry van loads, or reefer loads, the following steps will guide you in the process of becoming a truck driver.

Step 1:  Decide on your preferences.

Are you already a company driver?  Are you about to run your first load after talking to a family member?  Why you want to run loads is just as important as any other step.  It is important for you to decide on the types of loads your company will carry, the types vehicles you will operate, and the states you will operate in.  Determining the answer to these questions will help you determine whether you’re going to run “hotshot” loads from Arkansas to Texas or whether your company will operate as a grain and gravel hauler.

Keep in mind, that in the trucking business, everything matters.  The type of truck you choose affects the routes and loads you can get.  Subsequently, your insurance coverage and rates will also be affected by your load type, truck type, and your operating radius.  So, do your homework!

Step 2:  Obtain your USDOT number, Insurance, and Operating Authority(if needed)

Regardless of whether your company operates as an intrastate carrier or an interstate carrier, you must obtain your USDOT number prior to running your first load.  The USDOT number is assigned to your company and must be displayed on your vehicle’s driver side door, along with your home office city, state, and company name.  Failure to do so could result in compliance violations.  As a new registrant, an violation could result in a mandatory audit or fine from the US department of transportation.  To apply for a first top USDOT number, new applicants can go to Federal Motor Carrier Safety Administration’s website  at www.fmcsa.dot.gov .  The USDOT number is free.

Since your company has a commercial vehicle, everyone wants make sure that the vehicles you operate are properly insured.  So from this point on, if you need commercial insurance contact us here and we will get you started.

After obtaining your USDOT number, you may be required to obtain your operating authority.  Your operating authority dictates the type of operation your company can run, the type of cargo you can carry, and part of the state you can legally operate in.  Since a company can have more than one operating authority, I suggest you visit www.fmcsa.dot.gov/registration-licensing/registration-steps.htm to find out the costs and procedures involved in obtaining your operating authority.

Step 3:  Drug Testing Consortium and New Registrant Program

According to the FMCSA, all new U.S. and Canada comiciled motor carrier owners and operators seeking authority to conduct interstate operations within the United States are required to subscribe to a safety assurance program for the first 18 month period.  During the first 18 month period:

• your roadside safety performance will be closely monitored to ensure your company has basic safety management controls in place
• A safety audity will be conducted by the DOT once you’ve had enough time to put your safety management controls in place.
• Failure to demonstrate basic safety management controls may result in having your registration revoked.

As a new entrant, you will receive a number of phone calls and faxes from companies that offer compliance service.  Shop quickly, but wisely.  These programs vary from tremendously.  Always look for a company that will assist you with check your driver backgrounds, driving records, safety and compliance, as well as random drug testing for your drivers.

Step 4:  Texas Truck Drivers- Register with the Texas Department of Motor Vehicles

If you wish to operate in the state of Texas, you will also need to register your vehicle with the Texas Department of Motor Vehicles.  The certificate number issued by the state will allow you the ability to logon and register your trucks and trailers with the state.  After registering with the state of Texas, you will be able to print your cab cards, insurance cab card,  and more.  Visit www.txdmv.gov/motor_carrier/registration.htm  or call the state of Texas at 1 (888) 368-4689 for more details.

After registering with the state of Texas, you are now ready to begin soliciting contracts and loads with various carriers.  There are still expenses you’ll need to consider like Fuel Tax, getting loads, dispatching services, and paperwork.  Becoming an owner-operator can be a great way to take your career to a new level.  At this point you become the master of your own destiny.   It always helps if you network with other owner operators in order to develop best practices for your business.  Remember that good planning and being prepared are key in beginning your successful owner-operator business.

A company run by former American International Group Inc Chief Executive Maurice “Hank” Greenberg sued the U.S. government for $25 billion, calling the 2008 federal takeover of the insurer unconstitutional.

The lawsuit marks an unusual effort to force the government to pay shareholders, who have seen AIG’s stock price tumble 98 percent since the middle of 2007, when the insurer’s risky bets on mortgage debt through credit default swaps began to falter.

Greenberg’s company, Starr International Co, also filed a lawsuit against the Federal Reserve Bank of New York, whose president at the time of the takeover was Timothy Geithner, now U.S. Treasury Secretary.

via Starr International Files $25B Suit Against U.S. Over AIG Takeover.

As a Dallas business owner, it is important for you to watch your bottom line.  With today’s business climate, business owners can ill afford to overspend on things like insurance.  Before you start cutting your insurance coverages, consider the impact of removing coverage from your policy.  This article will discuss three different scenarios where the longterm cost to a business outweighs the short term savings gained from reducing the coverage on your business insurance policy.  So watch out for the scenarios where saving money will cost your business time and money.

Scenario #1:  Removing Physical Damage Coverage from a Truck insurance policy

Owner operator truck drivers use their trucks to make a living.  Even though you’re a professional driver, what will you do about the car full of teenagers driving down the road?  Imagine this, your truck is involved in an accident with an uninsured teenage driver.  Shortly before your accident, you asked your insurance agent to remove collision and uninsured motorist coverage from your insurance policy.  Now, you ‘re faced with trying to replace your commercial vehicle with a rental truck.  Unfortunately for you, truck rental places charge a daily feel and a fee per mile. 

The scenario I just described, happens all too frequently.  Owner operator truck drivers want to save money; only to cost themselves thousands in avoidable fees and expenses at the time of the claim.  In this case, the driver of the truck should have kept collision  and fire and theft on the truck in case of a claim.  Another alternative for this dallas texas business owner is to keep uninsured motorists protection on the policy.  The more you think about it, the more you realize that if your truck is your primary means of income, you should insure it as much as possible.

Scenario #2:  Purchasing a General Liability policy when a Business Owners Package is available.

For many small Dallas businesses, insurance can be a hassle.  Many businesses only purchase general liability because they are required to purchase the policy in order to get a new contract.  In cases like these, the business owner states that he only wants to get the general liability policy.  In the insurance world, the general liability policy is only a part a comprehensive insurance package.  In many cases, artisan contractors and small businesses can purchase  much more robust policies that include commercial auto insurance, general liability, office (premises) liability; and even coverage for business property.  For business insurance shoppers that fit into this category, the package is much more comprehensive but less expensive than the smaller policy.  In this case, less expensive means saving money, and in my book; saving money on your business insurance policy is a good thing.

Scenario #3:  Failing to disclose all information

For a business owner, it is cardinal sin to conceal information from your insurance agent.  In the past, I’ve actually talked to Dallas business owners that attempted to hide drivers and vehicles from the insurance company.  Recently, I had a case where  a client explained that they would be making adjustments to their policy to increase their fleet.  As a business owner, you  are financially repsonsible for any damage caused by a vehicle or driver that you hire or own.  The last thing you want to happen is to purchase a new vehicle and fail to notify your agent or insurance company.  As I always say, the time of a claim is the wrong time to figure out if you have coverage.  As a business owner , disclosing all information to your insurance gives you the best chance of ensuring adequate coverage at the time of a claim.

Reducing and exposure to catastrophic financial loss is the reason your business purchased insurance.  Regardless of whether required or not, it is always wise to adequately cover your business against unforseen accidents and other occurences.  For more Dallas business insurance tips or get an insurance quote, use the contact form below or contact TXINSURANCEPRO.COM at (214)717-4326.